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Regulatory Notice 08-81

FINRA Reminds Firms of Their Sales Practice Obligations with Regard to the Sale of Securities in a High Yield Environment

FINRA is issuing this Notice to remind firms of their obligations in the sale of securities such as bonds, bond funds, structured products and non-conventional investments, in a high-yield environment.1 The yield on many of these instruments in late 2008 reached unusually high levels, which may increase their appeal to some investors. FINRA reiterates the guidance set forth in previous Notices and reminds firms that they are obligated to balance any discussion of yield with an appropriate discussion of the features of these instruments and the risks presented.2

Questions concerning this Notice should be directed to Angela C. Goelzer, Associate Vice President, Investment Company Regulation, at (202) 728-8120.